Kansas gaming regulators ordered six fantasy sports apps, including Underdog Fantasy, to leave the state over “illegal sports wagering,” according to findings from an LSR open records request.
“I can confirm that we have sent out six cease-and-desist letters to date to various parties who may be in violation of Kansas law,” Kansas Racing and Gaming Commission General Counsel Judith Taylor told LSR.
An industry source confirmed to LSR that Underdog was one of the six companies to receive a cease and desist letter.
What Kansas wrote on fantasy sports operators
Regulators sent the letters beginning Sept. 7, after KRGC Executive Director Don Brownlee issued an internal memo stating that 10 companies are operating illegal Kansas sports betting under the guise of fantasy sports. The memo reads in part:
“Recently the Kansas Racing and Gaming Commission has become aware of several illegal sports wagering operations in Kansas. The Illegal operations were calling themselves “fantasy” sports when they were, in reality, accepting wagers on player propositions or pools. The acceptance of wagers on player propositions and pools are solely to be offered in Kansas by licensed Kansas Lottery gaming facility managers or their interactive sports wagering platforms.”
“After an investigation, we have determined the best course of action is to send a cease and desist letter to each offending party. Over the next couple weeks, we expect to send approximately ten letters to illegal sports wagering operators.”
Kansas joins New York, Florida in fantasy sports crackdown
A representative with the commission did not identify other companies by name and said several investigations are still ongoing.
Over the past year, popular pick’em games have landed Underdog and similar operators including PrizePicks under scrutiny in states including New York, Florida and Michigan. Reasoning for the crackdowns has varied from issues with a sportsbook-like, player vs. house format to a belief that over-under fantasy mimics player prop parlays.
Unlike New York and a handful of other states, Kansas does not require fantasy companies to obtain licensure by the state.
Underdog left state after memo, PrizePicks remains
Underdog Fantasy pulled pick’em games from Kansas in November, though it still offers traditional peer-to-peer fantasy in the state. A spokesperson with Underdog declined to comment.
PrizePicks, meanwhile, continues to operate in the state. Earlier this week, PrizePicks agreed to pay $15 million to New York for operating without a license for over three years. As part of the settlement, it will stop offering paid pick’em fantasy in New York.
A spokesperson with PrizePicks did not comment when contacted.
Kansas daily fantasy sports laws
The KRGC maintains broad authority over Kansas sports betting, which launched in late 2022. However, it is less clear who regulates the fantasy sports industry.
A 2015 law exempts DFS contests from Kansas criminal statutes in illegal gambling and excludes them from the definition of “bet” depending on certain conditions. As listed on the KRGC website, those include:
- Prizes and awards must be established beforehand and their value must not be determined by the number of participants or their total entry fees paid.
- Winning outcomes must reflect the relative knowledge and skill of participants and are determined predominantly be accumulated statistical results of the performance of an individual athlete in multiple real-world sports events
- Winning outcomes must not be based on the score, point spread, or performance of a team or multiple teams
That law was, of course, written years before companies like Underdog and PrizePicks began offering pick’em games.
LSR reporter Mike Mazzeo contributed to this story.
